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- Dubai 04:25 05:43 12:19 15:46 18:50 20:09
Strong oil prices will ally with high production to boost Saudi Arabia’s actual budget revenue by nearly 26 per cent in 2013 and this will widen the actual fiscal surplus by a whopping 19 times, according to a local report.
The world’s dominant oil exporter projected revenue at SR829 billion in 2013 and expenditure at a record high of SR820 billion, with a surplus of SRnine billion.
The government is believed to have assumed a price of $70 for its crude this year but prices could average above $100 while output will remain far above nine million bpd.
As a result, actual revenue will likely climb to around SR1,047 billion (Dh1,036 billion) in 2013 and this could tempt the government to boost spending to nearly SR870 billion (Dh862 billion). This will create an actual surplus of around SR177 billion (Dh175 billion), more than 19 times the budgeted surplus.
The report by the Riyadh-based Jadwa Investments, sent to Emirates 24/7, showed the surplus this year would be far below the 2012 surplus of SR366 billion and that in 2011 of nearly SR291 billion but much above the 2010 balance of SR88 billion. This also compared with an actual deficit of around SR87 billion in 2009, when oil prices dipped to around $60 a barrel and the Kingdom’s crude output was as low as 8.2 mbpd.
Jadwa’s report showed the price of Saudi crude could average around $99.4 a barrel this year while oil production could fall from 9.8 mbpd to 9.6 mbpd, far higher than the 2011 oil output of about 9.3 mbpd.
Jadwa said the surge in revenue would help Saudi Arabia to cut the public debt to SR90 billion at the end of 2013 from SR99 billion at the end of 2012 after it surpassed the Gulf Kingdom’s GDP in late 1990s.
It said high spending would also spur growth, forecasting an increase of 4.2 per cent in real GDP. In current prices, GDP is projected to climb by 3.3 per cent to a record high of SR2,819 billion in 2013 mainly because of an increase in the non-oil sector.
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